Ecofy is a non-banking financial company (NBFC) with programs focused on climate-positive solutions. Ecofy has raised ₹380.5 crore (approximately $45 million) in its Series B fund round. This was an important capital injection co-led by British International Investment (BII) as the development finance institution in the UK and Finnfund, a Finnish development financier.
Existing investors were also active participants in the round, such as the Dutch entrepreneurial development bank FMO and the promoter Green Growth Equity Fund (Eversource Capital). This new achievement underscores the increased global trust in the Ecofy program of offering affordable, specialized credit to accelerate India towards a more sustainable economy.
Operational reach and fund utilization
The round signifies a healthy valuation of the business estimated at approximately ₹800 crore (approximately $89 million) post-allotment. As per the regulatory filings, the board of Ecofy made a special resolution to issue 20 equity shares and ₹38.05 crore Series B preference shares to fit the investment.
British International Investment contributed the most ₹220 crore, and Finnfund Digital Access Impact Fund contributed ₹70.5 crore. FMO and Eversource Capital contributed ₹65 crore and ₹25 crore, respectively, as the remaining capital. Eversource Capital is the biggest shareholder after this transaction, with a share of 49.59%, and BII and FMO hold large shares of 20.36% and 16.23%, respectively.
The new capital of this Series B senior financing is to be used on a number of urgent business and strategic initiatives. Ecofy will utilise the funds in fulfilling its increasing working capital needs and in acquiring a large loan book in its main working verticals.
The company is specifically keen on expanding its operations in the retail green lending market. It aims to penetrate those that are central to the reduction of the carbon footprint. These are the financing of electric vehicles (EVs), of two-wheelers, three-wheelers, and small commercial vehicles, and the incentivization of rooftop solar systems to households and small enterprises.
In addition to lending, the capital will be used to upgrade the technological base of the company and diversify its products. Ecofy has a mission of establishing itself as a niche financier by diversifying the geographical locations of India.
The company has operations in some of the major states, such as Maharashtra, Gujarat, Delhi, and other states, where it collaborates with individuals and micro, small, and medium enterprises (MSMEs). With its distribution muscle and broad sector-specific insights, the company aims to become an accelerator for people who desire to play their role in the green transition, yet lack formalized and affordable credit to purchase sustainable assets in the past.
Growth and product portfolio
Ecofy was founded in 2022 by Rajashree Nambiar and Govind Sankaranarayanan. Ecofy was incorporated with a definite goal of funding economically viable climate projects.
Its product offering is specifically tailored to fill this missing middle market gap in the market, that is, individuals and small companies, which are frequently underserved by conventional banking institutions on climate-related loans. The company has already served more than 1,20, 000 customers within three years, and it finances the following categories of assets like energy efficient equipment, waste recycling, water management, energy storage, and the wider e-mobility solutions.
The expansion trend of the company has been marked by high scale and rising market relevance. In the recent few fiscal years, Ecofy has recorded an increase in its financial performance, whereby the revenue from operations has increased 4.8 times to ₹93.3 crore in FY25 compared with ₹19.19 crore in FY24.
Although the company experienced a slight increase in its losses of ₹42.28 crore in the same period, this is mostly due to the heavy investment that the company had to make in developing a highly specialized and high-performance operating culture and a sturdy system of governance at the bottom level. The leadership is also focused on the creation of a high-quality portfolio with rigorous international impact investors.
Conclusion
The Series B funding round of ₹380.5 crore is a landmark in the history of Ecofy because it will firmly establish the company as one of the leaders in the green finance industry of India, which is still in its early stages. Since India has a long-term journey to become a net-zero carbon emitter, niche actors such as Ecofy will be necessary to reconcile the existing high-level sustainability objectives with the low-level implementation of green technologies.
With the emphasis on retail green lending and the highest possible number of customers reaching more than a hundred thousand, Ecofy is demonstrating that there is a huge, bankable need for sustainable finance that is both profitable and responsible to the environment.
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